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CITICORP v. WESTERN OIL & REFINING

July 22, 1991

CITICORP INTERNATIONAL TRADING COMPANY, INC., PLAINTIFF,
v.
WESTERN OIL & REFINING COMPANY, INC., ROBERT A. ZANDER AND KARIN ZANDER, DEFENDANTS



The opinion of the court was delivered by: Sweet, District Judge.

  OPINION

Plaintiff Citicorp International Trading Company, Inc. ("CITC") has moved to dismiss the counterclaims and third party complaint of the pro se defendants Robert A. Zander ("Zander") and his wife Karin Zander ("Karin Zander") under the provisions of Rules 8, 9(b) and 12(b)(6) of the Federal Rules of Civil Procedure. Because both sides have submitted some material outside of the pleadings the motion will also be deemed as one for summary judgment under Rule 56. The Zanders have also moved to dismiss the complaint for failure to comply with discovery demands. For the following reasons, CITC's motion is granted in part and denied in part, and the Zanders' motion is denied.

PRIOR PROCEEDINGS

The prior proceedings in this action prior to the instant motion were described in the last opinion of the court filed on January 16, 1991, 1991 WL 4502 ("the January Opinion"), which denied CITC's motion for judgment on the complaint and granted the Zanders leave to file an amended answer. That description is incorporated here by reference, and familiarity with it is presumed.

In the January Opinion, the Zanders were granted thirty days within which to file an amended counterclaim and third-party complaint. The amendments were filed on February 15, 1991, and the instant motion followed. It was heard and submitted on March 22, 1991. While it was sub judice, the Zanders moved to dismiss the complaint for failure to comply with discovery demands, a motion which is denied in view of this opinion.

DISCUSSION

Standard for a Motion to Dismiss

In dealing with a motion to dismiss for failure to state a claim under Rule 12(b)(6), Fed.R.Civ.P., the court must construe the complaint's allegations in the light most favorable to the plaintiff and accept those allegations as true. See Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974); Dacey v. New York County Lawyers' Assoc., 423 F.2d 188, 191 (2d Cir. 1969), cert. denied, 398 U.S. 929, 90 S.Ct. 1819, 26 L.Ed.2d 92 (1970). It should then dismiss the complaint only if it appears beyond doubt that the plaintiff can prove no set of facts supporting its claim that would entitle it to relief. See H.J. Inc. v. Northwestern Bell Tel. Co., 492 U.S. 229, 109 S.Ct. 2893, 2906, 106 L.Ed.2d 195 (1989); Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 2232, 81 L.Ed.2d 59 (1984); Dahlberg v. Becker, 748 F.2d 85, 88 (2d Cir. 1984), cert. denied, 470 U.S. 1084, 105 S.Ct. 1845, 85 L.Ed.2d 144 (1985).

The Surviving Counterclaims Satisfy Rule 8(a)

Rule 8(a) provides that each pleading contain a short and plain statement of the claim showing that the pleader is entitled to relief. January Opinion at 9; Morabito v. Blum, 528 F. Supp. 252, 262 (S.D.N.Y. 1981). The Amended Counterclaims consist of two hundred and twenty paragraphs which allege thirteen causes of action.*fn1 While many of the allegations are repetitive and while the pleading is most assuredly not a model of clarity, length alone is not a sufficient grounds for dismissal under Rule 8(a). The primary problem with the Zanders' pleading is that at least some of the later claims repeat the allegations of earlier claims with the main difference being the nature and the amount of damages which are alleged to have occurred as a result of CITC's behavior. However, given the Zanders' pro se status, the surviving counterclaims will not be dismissed on the basis of Rule 8(a) violations.

The Zanders May Not Assert Corporate Claims

The January Opinion held that the Zanders could not assert claims on behalf of their corporations Western Oil & Refining Company ("Western") and Tanner Square. The Zanders have responded to this by re-alleging many of their former corporate claims as personal claims. As explanation for this course of action, they allege that they as individuals were made parties to the Representative Agency Trade Agreement (the "Agreement"), the contract between Western and CITC out of which many of the claims arise, and alternatively that they are entitled to collect for CITC's breach as third-party beneficiaries of the Agreement.

The claim that the Zanders were made parties to the Agreement is based on the allegation that:

  On or about August 1987, Plaintiff agreed to
  perform its duties and obligations under the
  Agency contract on behalf of Defendants as
  consideration for Defendants executing the
  promissory note. Ed Kowalcyk, legal counsel for
  Citibank, specifically stated that all of the
  duties performed by Plaintiff and its parent
  Citibank for Western also were performed for
  Defendants as individuals and that CITC and
  Citibank were the Defendants' Agent.

Counterclaim ¶ 196.

However, the Zanders cannot rely on this alleged oral modification to the Agreement to support their claims on behalf of Western. The Agreement was between Western and CITC, and made no reference to the Zanders as individuals. In Article 5.1, it provided that "this Agreement may only be amended or modified by an appropriately captioned written agreement duly executed by both parties." The Zanders have not alleged that there was ever any writing reflecting the August 1987 modification to the Agreement.

Under § 2-209 of the U.C.C., if a written contract prohibits modification except in writing, it may not be modified orally: "A signed agreement which excludes modification . . . except by a signed writing cannot otherwise be modified. . . ." Similarly, § 15-301(1) of the New York General Obligations Law states:

  A written agreement or other written instrument
  which contains a provision to the effect that it
  cannot be changed orally, cannot be changed by an
  executory agreement unless such executory
  agreement is in writing and signed by the party
  against whom enforcement of the change is sought
  or by its agents.

Here, there can be no doubt that the alleged oral contract was executory, as the asserted agreement was that CITC would perform all of its duties and obligations under the Agreement for the personal benefit of the Zanders as individuals. Therefore, both statutory provisions cited above compel the conclusion that the oral modification is unenforceable, and the Eleventh Counterclaim must be dismissed.*fn2

As for the Zanders' claim that they were intended third-party beneficiaries under the Agreement,

  Essential to status as an intended beneficiary
  under [§ 302(1) of the Restatement (Second) of
  Contracts] is either that "performance of the
  promise will satisfy an obligation of the promisee
  to pay money to the beneficiary" or that "the
  circumstances indicate that the promisee intends to
  give the beneficiary the benefit of the promised
  performance."

Fourth Ocean Putnam Corp. v. Interstate Wrecking Co., 66 N.Y.2d 38, 44, 495 N.Y.S.2d 1, 485 N.E.2d 208 (1985). Here the Zanders have not asserted that CITC owed them anything prior to the time the Agreement was signed, nor have they alleged any facts which would indicate the requisite donative intent. Hence their assertion that they were intended third-party beneficiaries must be rejected and the Twelfth Counterclaim must be dismissed.

Therefore, the Zanders are not entitled to recover for breach of the Agreement or any other torts alleged to have been committed ...


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